So you've tied the knot — but are have you tied together your finances, too?
Tons of couples choose to consolidate their finances for a gamut of reasons — to grow their investments quicker, to more easily manage shared household expenses, to build trust and display commitment, among other reasons. But according to a recent Finder.com study, one in three American adults have assumed all or partial responsibility for debt as a result of a romantic relationship, taking on an average of $11,485 per person. That adds up to $250 billion collectively, which suggests that couples aren't quite grasping the potential consequences of merging finances.
"Even if neither partner is in debt when entering the relationship, situations change as life progresses," says Jennifer McDermott, the consumer advocate for personal finance comparison website, Finder.com. "Employment shifts, health problems or legal issues are just some of the things that might turn up impact your relationship and in return, your joint finances."
We caught up with seven married women to explain why they have or have not merged their finances with their partners. Here's what they had to say.
1. No: To Avoid Any Potential Headaches
"We decided to keep our finances separate; we do an end of month accounting exercise where we split all expenses that are for the household — groceries, rent, electricity, insurance, cable, furniture or household items and supplies etc. and the rest is kept separate," says Shiwali Varshney, found of Conure, LLC. "We do not have a joint account either. We actually signed a post-nuptial agreement, as well, so that we keep non-marital assets separate and do not want much from each other but emotional support, love and companionship. Why? I was married before and had a joint account with my ex-husband. I didn’t think anything of it. All my salary was going to that joint account. I didn’t realize that my ex-husband could move the money without my permission from that account. So when I decided to leave him, the first thing he did was empty that account. I left him with $1,000 on me, which by some stroke of genius, I had put in a separate account. I didn’t get any support, even though I was going to business school as the first lawyer I hired was not good. I finally did get half of what I earned while I was married to him, but it was much later and I had to figure out the way to live during that time."
2. No: To Work Together as a Team
"My husband and I have a very different way of splitting bills that most other couples we know — we've managed to build our combined wealth considerably from very little to almost $6 million in assets and counting," says Swati Davidson, a business and success coach. "We've got two kids, many houses and a very nice lifestyle now. Unlike most couples we know, we have a different approach to money (along with pretty much everything else like household work, kids, etc). We refuse to focus on 'equal,' yet we both feel that that things are very fair. We find it odd when people intently 'split' things like money and household responsibilities. For example, how can I put a value on carrying kids for nine months, nursing them and demand reciprocity? Instead: When I was in corporate, I paid for the things that landed on my plate (food because I cooked, clothes for the kids, the nanny, household items, my own car, etc.). He paid for vacations, going out, our home, contractors and renovations, etc. After I quit to become an entrepreneur and part-time caregiver, he obviously picked up more (almost all direct expenses). We knew it was a short-term investment in my goals. But I still added value: cooked, pitched in more with the kids, took care of things that were easier to do since I had no set schedule. Now, I'm taking on more because cash is coming in through my business. I've taken over on expenses for the kids again, hosting more parties and covering the things in my world again. It works well! And we never fight about money."
3. Yes: To More Easily Manage Finances
"My partner and I merged our finances shortly into our marriage because it made sense for us," says Sarah Seright. "It had always been 'my money' and 'your money,' but that became problematic when we moved in together. My partner struggles with money management, so his bank account was almost always empty. That left me rushing to pay his bills on time and shoving the extra on my credit card every month. It didn't take long for us to realize that what we were doing wasn't working. The only accounts not stuck at zero were our credit cards, which were usually maxed. We now have the same bank account, credit card and phone plan. All of our bills are on auto pay, so we never have to worry about who is in charge of paying rent this month or Venmo-ing money back and forth. Merging our finances has saved us from thousands of money fights and kept us out of credit card debt."
4. Yes: To Show Commitment
"When we married, we became as one in everything — including finances," says Cyndi McConnell of www.trulovebakes.com. "I take care of paying the regular household bills, and we discuss everything else. We know to take care of the bills first and the rest is 'play money,' but even that is a matter of discussion with how it is handled, even as little as purchasing clothing items. It's not a matter of me having to have his authorization or vice-versa, it is respect, love and trust. Having joint accounts is a sign of commitment in a marriage. If one isn't committed in the financial area, as well, then there isn't much of commitment in your marriage in other areas. Having separate accounts leaves to much to chance and distrust."
5. Yes: To Keep Track
"Married for over four and a half decades, we have always merged 3/4 of our paychecks to manage our household," says Carol Gee. "We also opened individuals accounts that we managed separately with the remaining 1/4 as I have always believed it was important for each partner to have funds to spend as they wish. This gives each access, independence, freedom to spend as they wish aside from household funds. Merging accounts, we knew how much we had to pay our bills each month. Equally important was that one person paid the bills, verus one paying light bill, one the mortgage etc. to ensure all were paid when due. Having good credit and paying bills on time has always been very important to me. (At first, we tried both writing checks, my husband dropping the bills in the mailbox, etc.) before online bill pay. Both were disasters with him forgetting how much he wrote a check for or forgetting to mail the bills). Using this method, over the years we bought a home, several cars, gone on several exotic trips has worked for us. I couldn't imagine doing it any other way."
6. Yes: To Establish Trust
"Yes, I am married and merged finances with my husband," says Karen Ford. "If a person marries, it’s because you trust them. If I can’t trust my husband, then why would I have married him? We both talk finances, budget together and discuss financial decisions."
7. Yes: To Avoid the Hassle
"I never questioned my decision to combine finances with my husband," says Tina Willis, an Orlando-based personal injury attorney, and owner of Tina Willis Law." Neither of us had much income or assets when we married 18 years ago. And I have never felt any loss of power or anything else from the fact that he technically 'controls' the checkbook. To the contrary, I'm glad he takes care of that aspect of our lives. If I want to buy something, I don't need his permission, and we make all major joint purchase decisions together. I just cannot imagine the hassle, either, and added complexity, of trying to divide finances. I mean, married couples presumably share the same mortgage (or rent), utility and other bills. So, again, what would dividing finances do other than give us all another job — having to figure out which account paid what bill, or what percentage of that bill. What a mess and a hassle! We have a hard enough time trying to keep track of business vs. personal expenses, and countless other bills. Paying those bills from two sources for a lifetime seems like a nightmare."
AnnaMarie Houlis is a multimedia journalist and an adventure aficionado with a keen cultural curiosity and an affinity for solo travel. She's an editor by day and a travel blogger at HerReport.org by night.